Greentree responds to county concerns

Although the Alto Lake Water and Sanitation District officially severed its arrangement for service with the Greentree Solid Waste Authority last month, several issues still nag Lincoln County commissioners and authority officials, the major being how to cover the annual payment on a construction loan for the new GSWA administration, recycling and support center on U.S. 70 east of Ruidoso Downs.

The governing board of GSWA broke its silence this week to respond to issues raised by commissioners based on letters received from the chairman of the Alto district board. However, even while refuting or clarifying information in those letters, Chairman Sam Hammons, who also is mayor of Capitan, stressed that the GSWA has a history of providing quality services to the district and, "still is willing now and in the future to provide any services needed or requested by the district."

"Our door is still open to the district customers," he wrote in a Dec. 11 letter to county commissioners, copied to the Alto district board.

His preference and that of Operations Manager Debra Ingle was not to respond to Adamy's remarks in various letters and simply to continue working toward a solution with the county commission. But Greentree consultant Joe Lewandowski said the situation changed when commissioners reacted to what he characterized as a "misleading" statement in an Oct. 25 letter from Adamy stating the authority's offer for service was 46 percent higher than a bid received from a private contractor.

"He states that the GSWA 'highest option' is $310,000 and Sierra Contracting's 'lowest option' is $167,000," Hammons wrote in the six-page response letter.

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"This is true, but he is not comparing all aspects of the costs and services to be provided. This is not comparing apples to apples. It is more like comparing a watermelon to a grape. GSWA did provide various options that did reduce the costs, but Mr. Adamy did not mention these in his letter." Hammons enumerated eight proposals that include various combinations of services, such as GSWA continuing to provide billing services, something not offered by the private contractor.

Other services

Some of the other services that were not part of the private contractor's bid that GSWA could provide included taking action against illegal dumpers, allowing customers to use other authority outside facilities for disposal and recycling, providing management oversight of the collection center in Alto, providing all of the necessary equipment and for services, covering the debt service associated with support services and providing enough money to cover the costs associated with the post closure care of the Capital landfill, a debris facility that during its existence accepted much of the waste tied to construction in the Alto area. The private contractor's proposal did not include post closure maintenance and twice-a-year monitoring required for the next 18 years.

"GSWA provided the funding through a lease agreement with the (Alto sanitation) district to finance the construction of the Alto Collection Center," Hammons wrote. "In other words, GSWA paid $53,000 annually for the last 3.5 years from the fees to pay the district loan at $4,425 per month for 42 months. This $53,000 was included in the $310,000 GSWA calculations Mr. Adamy quotes in his letters." The private contractor's proposal didn't cover that cost.

"Both the district and the GSWA realized the need for an improved facility at this location due to large volumes of waste and recyclables from this area," Hammons wrote. "The district agreed to enter into a loan agreement with the New Mexico Rural Infrastructure Loan (to build). The GSWA agreed to enter into a 'lease' agreement for the facility with the district for the exact amount necessary to make the debt payment.

"During this time period, GSWA operated the facility in the red, using other GSWA revenues to cover all costs for the facility. No other entity member subsidized the Alto Collection Center. The other GSWA revenues were from roll-offs, commercial and recycling revenues."

Inquiries

As for Adamy's statement that the district experienced difficulties obtaining an answer to "repeated inquiries" about the extension or renewal of Greentree's operating lease, Hammons wrote that only one inquiry was received from the district dated Aug. 15.

"This inquiry was sent after the district manager attended the July 25 meeting," he wrote. "At that meeting, the GSWA Board instructed the district manager that the GSWA needed a letter from the district board requesting and describing terms of services to be provided to the district."

All prior contact was verbal without specifics on the needs of the district, he wrote. All items requested by the district, such as GSWA's commercial rates and loan ordinances, were provided, he contended.

It is true that the authority did not submit a response to the district's request for proposals, the mayor wrote, adding that there were reasons.

"GSWA does not bid on these larger contracts through this process, due to the concern for bidding against private enterprise," Hammons wrote. "This concern arises from utilizing the benefits of governmental services versus private enterprise." He gave the example of the GSWA, which is composed of several municipal entities and the county, not being subject to the same taxes as a private company. A private contractor also must pay higher non-member tipping fees at the regional landfill. The authority, as one of the two owners of the landfill, receives a reduced rate.

With that in mind, GSWA officials offered to negotiate with the district as allowed under the Procurement Code exemption for government-to-government negotiations, he wrote. Several proposals were submitted and at one point, only $1 a month per customer separated the district and authority from a deal.

"The last offer from the district to GSWA was, 'if we could provide the same services for $14.95 per customers, we had the job.'" Hammons wrote. "GSWA rejected this offer and explained to Mr. Adamy that this was $2 per customer below the actual cost to provide those services. This would require that other county residents outside the district pay that cost for the district customers and GSWA refused to pass that cost onto them."

Rates

Adamy contended that complaints to GSWA about high monthly rates for customers "have fallen on deaf ears." But Hammons pointed out that unlike the private contractors, the GSWA provided a three-year actual history breakdown of all expenses related to each type of service, such as security, landfill fees, utility costs, insurance and labor.

"The only difference (between the district's offers and that of the private contractor) was the debt service, accounts receivable collection and illegal dumping enforcement," Hammons wrote. "Mr. Adamy states that the contractor is providing the services at 46 percent less than GSWA, but the district only reduced the rate to customers by 6 percent. This must be due to Mr. Adamy's statement made at the first meeting with GSWA representatives that the district needs $70,000 in revenue to finance a new loan to repair the water system, problems with lines and fire hydrants."

Covering the debt service continues to be the main concern for the authority, Hammons stated. The GSWA already cut personnel and adjusted its operation and overhead to offset the loss of about 1,200 customers in the Alto district. When the debt was assumed to build a new administration, service and support center with concurrence of members, the idea was to spread repayment across all customers.

"The district has chosen not to be a part of this group effort any longer," Hammons wrote. "With their withdrawal, this requires the cost be spread among the remaining customers" or that services to customers be reduced.

Hammons also noted that during the aftermath of the Little Bear Fire, other haulers operating in the county, including the district's bidder, were concerned that GSWA rates were too low and contended it needed to increase rates to customers for hauling away burn debris to ensure a competitive atmosphere in the county. A commercial rate increase was approved by GSWA.

As for the village of Ruidoso, one of the authority's original members, setting a precedence when it pulled out from the garbage collection operation, Hammons contended that the process was significantly different and took two years to ensure all issues were resolved, legal and moral, Hammons wrote. That included service, equipment, debts, environmental issues and continuing jobs for employees.

"In the Ruidoso process, the village and GSWA attempted to not cause any financial hardship on those employees. Most were transferred (to the village) along with the benefits they had earned." Hammons wrote. Unfortunately in the district's move, the employment was severed for several GSWA employees, some long-term, he wrote.

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